Business

3 Things We Aren’t Talking About Enough by Oliver DeMille

May 19th, 2016 // 8:19 am @ Oliver DeMille

These three things are big deal. A very big deal. They’re floating around there in the back of our minds, but we don’t talk about them very much in our current society.

We need to start.

I

First, it is clear to almost everyone that the Drone Revolution has drastically changed the world—probably in ways that we can’t really undo. Whatever other functions they’ll eventually fulfill, drones are the ultimate war machine. They can be programmed to do things unimagined in earlier wars, like search out specific people from certain races, religions, viewpoints, business or educational backgrounds, etc.

They can be programmed to target a specific person. And all his/her friends. Everyone he/she loves. Those who agree with him/her on political issues. Governments can use drones on their own people, as well as in battle.

Very few people are taking this very seriously. On the one hand, it’s so potentially monstrous that we don’t like to think about it. Imagine drone technology in the hands of a Stalin, a Hitler, a Nero, Caligula or Mao, Saddam Hussein or an ISIS sympathizer in your neighborhood. If history has taught us anything, it’s that bad guys do sometimes rise to great power.

It will happen again, and drone tech combined with computing power is a recipe for disaster.

On the other hand, if we did want to stop it, what would we do? Most people believe it’s a fait accompli. No chance of turning it around. They’re probably right.

II

Second, the Crowdsourcing Revolution isn’t over—it’s just beginning. It has largely put the newspaper industry on the ropes, and the book industry is also now under the gun as Amazon grows. In fact, many brick and mortar malls are increasingly empty as Internet sales on many types of products and services soar. Education at all levels is facing serious competition from free online learning sources, and big swaths of the health care sector are being crowdsourced as well.

The good side of crowdsourcing makes a lot of things less expensive, easier to find, and quicker to obtain (or learn). The downside is that the large companies that control the data have algorithms that can influence us in ways we never imagined. For example, a man texts his wife to find out where a certain kind of cereal is in the pantry, and within minutes his smartphone chimes and offers him a coupon for the same cereal—from the supermarket closest to his home. Or if he texted from the office, it lists the grocery store nearest to his work.

This kind of data-mine-marketing is becoming a commonplace experience for those who use certain apps, and while it might feel a bit creepy at first, over time people get used to it—and even grow to expect it. Very Minority Report. How much governments and private organizations are using this kind of tech is unclear, but it’s growing. Add personal location tracking technology to the mix, and we really are living in a surveillance state.

III

Third, there’s a new buzzword floating around in economic circles: “Crowd-Based Capitalism.” The idea is that in the emerging 21st Century economy we’re evolving a whole new economic model. Not socialism. Not capitalism. Certainly not free enterprise. A new approach. As one book from MIT put it, we’re moving into a “Sharing Economy,” where “the end of employment” is being replaced with “the rise of crowd-based capitalism.”

The idea that employment as we’ve known it for the last six decades is increasingly outdated. For example, in the May 2016 issue of The Atlantic an article showed how one couple used up their entire life and retirement savings—and the entire life savings of the husband’s elderly parents—to put their two daughters through college. The idea of college training being essential is now being taken to incredible levels: The savings of two couples wiped out, just so their offspring could graduate with a degree—in an economy that doesn’t value degrees like it used to. (See “My Secret Shame,” The Atlantic, May 2016)

A truly new economy is emerging, but most people haven’t realized it yet. They’re still caught in the old—and paying for it in tragic ways.

Another example: When 2016 presidential candidate Ted Cruz said the following, “The less government, the more freedom. The fewer bureaucrats, the more prosperity. And there are bureaucrats in Washington right now who are killing jobs…”, the response was immediate. Two professors, one from Yale and the other from Berkeley, replied that the opposite is true: The bigger the government, the more freedom, and the bigger the bureaucracy, the more prosperity. (“Making America Great Again,” Foreign Affairs, May/June 2016)

A lot of people actually believe them.

But reality is still reality. Crowd-based capitalism means more government, and this isn’t the path to a great economy. The thing that is actually rising to replace the 1945-2008 era of employment it is a reboot of entrepreneurship and small business ventures.

The new economy can go in one of two directions:

1. Government reduces the amount of anti-business and job-stifling regulations, and spurs a major entrepreneurial boom. This will create a lot more jobs, opportunities, and incentives for increased global investment in the U.S. economy.
2. Government keeps increasing business-stifling regulations and takes the profits from businesses (big and small) to create a “sharing economy.” This will create a much higher rate of dependency on government welfare and state programs, reduce the number of people fully employed (making enough to live in the middle or upper class), and drive investment to other nations.

How the so-called “sharing economy” differs from socialism is actually academic. Yes, on paper it has a somewhat different structure than Marxian socialism. But for the regular people it’s going to feel pretty much the same. A few wealthy and powerful elites at the top, a small middle class of managers and professionals who work mostly for the elites, and a burgeoning underclass living largely off government programs.

Two books* on this topic are: (1) The Sharing Economy: The End of Employment and the Rise of Crowd-Based Capitalism by Arun Sundrarajan, and (2) Saving Capitalism: For the Many, Not the Few by Robert Reich.

For the other side of the argument—why freedom and free enterprise are the real answer—see my latest book, entitled Freedom Matters.

Middle America is still experiencing a serious economic struggle. Things are getting worse, not better. As one report on the heartland put it: “On every sign, in every window, read the vague and anxious urgings…Remember the Unborn; …Don’t Text; Don’t Litter; Buy My Tomatoes (Local!); Let Us Filter Your Water; We Can Help With Your Bankruptcy. Then bigger gas stations sprawled on crossroad corners, unoccupied storefronts…another consignment store.” (“The Country Will Bring Us No Peace,” Esquire, May 2016)

As an ad for Shinola products reminds us: “There’s a funny thing that happens when you build factories in this country. It’s called jobs.” We haven’t seen very many factories built here for a long time. Crowd-based capitalism isn’t a solution.

Conclusion

Together, these three changes in our world are a very big deal:

• The Drone Revolution
• The Crowd-Sourcing Revolution
• The Post-Employment Economy

If you have more ideas on these important developments, share them. If not, learn more about them.

The future can be determined by a few elites who think about such things, or by all of us. The more regular people engage such important topics, the more influence we’re likely to have.

The truth is, we’ve forgotten Watergate and Kent State. (See “The Cold Open,” Esquire, May 2016) We’ve forgotten Nixon and that the 2000 presidential election was decided by the intervention of the Supreme Court. (Ibid.) We’ve forgotten a lot of things.

As one report put it: “We’ve forgotten how easily we can be lied to.” (Ibid.) If we let them, Washington and the media will just tell us what the elites want us to know—and think.

*affiliate links

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The Real Crisis of the 2016 Election by Oliver DeMille

September 10th, 2015 // 6:30 am @ Oliver DeMille

“U.S. median income is $42,000 per year, while the European median income is $27,000. That’s close to the average difference in annual income between U.S. high school grads ($28,000) and college graduates ($45,000). And the current elite class wants America to become more like Europe. This explains much of what Washington is doing these days.”

 What Is Coming

There is a serious crisis coming. Most people just hope it won’t come. Their subconscious minds tell them: “If we hope hard enough, and avoid thinking about it, maybe it won’t happen.”

Sadly, it isn’t quite that simple. The crisis is coming.

What’s the Crisis? Imagine this: It’s the summer of 2017, and we have another career politician in the White House. On the day of the 2016 election, or even earlier, we learned that none of the anti-Establishment candidates were going to win. Instead, the media informed us that the American electorate was putting another regular politician into office.

And since inauguration day, that president has followed a path similar to earlier presidents, from Bush I and Clinton, to Bush II and Obama: the national debt is still skyrocketing, our foreign policy is a disaster, the government is growing, increased regulations attack our prosperity every month, and the Supreme Court is legislating additional policies that hurt the nation.

On top of all this, the mandates of Obamacare are really kicking in now, increasing many small business costs by 30% or more annually—and as a result, those businesses that survive are laying off large numbers of employees. Your family health insurance premiums are up many thousands of dollars a year. The economy is still struggling, with less than a 2% growth rate, and good-paying jobs are increasingly scarce. At least one or two of your close friends or family members have lost their jobs.

In other words, it’s clear that the 2016 election has changed almost nothing. Terrorist attacks are increasing in both Europe and a few targeted attacks in the United States—as Iran uses its new $100 billion dollars to fund such violence. ISIS is still spreading, and China continues to increase its naval presence around the Pacific Rim. Moreover, Putin is becoming increasingly aggressive, not just in Eastern Europe but also in Syria, the North Pole, and the Pacific.

If the new president is a Democrat, there is a strong push to increase taxes and federalize even more state-level programs. If, contrast, if the president is a Republican… well, exactly the same thing is happening.

If we vote for the same kind of candidate we’ve voted for since 1988 (a career politician), we’re going to get the same thing we’ve experienced since…you know…1988. Meaning that career politicians are going to give us the same thing that career politicians have always given us:

Increased government. Very little positive change. A continual slide toward bigger government, higher debts, and decreased individual prosperity and freedoms.

Coming Paths

This is the crisis ahead: More of the same. Except that it’s continually a bit worse, year after year, election cycle after election cycle.

“The definition of insanity,” you remind yourself, “is to keep doing the same thing while expecting different results.” In business, the prime directive is that to actually change an organization, you have to significantly change the leadership. If career politicians keep running the White House, little is going to change. This is true.

It’s frustrating. We don’t want to believe it, because we hope things will be different this time. But each election proves that it’s the reality. Career politicians do what career politicians do. Over and over.

Specifically: whatever career politicians say as candidates, once they’re elected they do what they’ve done before. Count on it. The following presidential candidates are not going to bring much change to Washington:

• Joe Biden
• Hillary Clinton
• Jeb Bush
• Chris Christie (to his credit, Christie is openly promising to do what career politicians do: just more of the status quo)
• Marco Rubio
• Scott Walker
• John Kasich (actually, at least Kasich has balanced two major budgets—the federal budget during the 1990s, and Ohio’s budget while serving as governor; thus, he’ll likely do this again—even if he doesn’t do much else, this is a pretty good thing)

But does anyone actually believe that if Jeb Bush is elected president we’ll reverse the national debt, repeal Obamacare, or seriously send education decisions and funding back to the states, where it belongs? No way.

The above candidates are part of the system; and reaching the pinnacle of the system they’ve spent their lives supporting won’t incentivize them to drastically change things. Whatever your political views, it’s clear that those who’ve made their lives in the system aren’t likely to alter it in any significant way. Period.

The following are a lot more likely to really change things:

• Bernie Sanders
• Carly Fiorina
• Rand Paul
• Donald Trump
• Ted Cruz
• Ben Carson

Say what you want about them, but they aren’t part of the typical Washington Establishment.

If elected, would one of them actually change things?

Maybe. Maybe not. But there is at least a chance.

In contrast, with the first list above, there’s no reasonable, rational expectation of real change.

Part II: What Will the Crisis Look and Feel Like for Americans?

Beyond the question of whether or not real change will come after the 2016 election, a deeper question is this: “If it doesn’t come, what will happen?”

In other words, “Where is our current national trajectory taking us?” First of all, if real change does come, it could take a number of different directions. That’s what change does. Genuine change is almost impossible to predict, because a significant change causes so many additional, cascading, changes.

If anyone on the first list above becomes our next president, I believe we have less than a 1% chance of changing course in a serious way that really shifts our national direction. Even if someone on the second list is elected, I’m convinced we’ll have less than a 40% chance of such a course correction (and 0% if it’s Bernie Sanders).

And let’s be clear: a course correction is desperately needed. If it doesn’t come, where are we headed?

Answer: In the early 1960s, many in the Euro-American elite class adopted the idea that the U.S. was beginning to outpace the nations of Western Europe—economically, technologically, and militarily. Moreover, they calculated that such a divide would be bad for business (specifically the business of the elites, which includes both the economic endeavors of the 1% and also their political influence).

To combat this growing divide, the elites began using their institutional, fiscal, and monetary influence to make the United States more like Europe. They began in earnest by dropping the gold standard in 1971, and providing an influx of elite money into higher education donations and endowments, and simultaneously with increased investment in and ownership of major media outlets.

Influenced by these funds and those who provided them, education began spreading the idea that America should be more like Europe, and the graduates of these programs increasingly dominated the campus scene through the seventies and eighties. By 1987, Allan Bloom decried what amounted to the Europeanized politicization of higher education in his bestselling book The Closing of the American Mind.

Choosing a Dream

Media increasingly reinforced this same message—“America should be more like Europe”—in stories and reports, from the major national newspapers to the Big 3 television networks. Nearly all cable channels and Establishment-supported Internet news outlets followed suit.

Among Establishment policy makers, Samuel Huntington’s writings on “Civilizations” and Francis Fukayama’s “End of History” essays pointed U.S. financial-, domestic-, and foreign-policy institutions (and bureaucracies) in the same direction.

Where does this leave us today? The “American Dream” includes the ideal that each household should achieve home ownership, financial independence (at least by the time of retirement), cars, savings, education for the kids, and a better lifestyle for each additional generation. In contrast, a middle class family in Europe typically lives in an apartment, has fewer children than American families, owns (on average) less than one car, and expects decreasing financial opportunities for coming generations.

To put this in financial terms, the U.S. median income is $42,000 per year, while the Western European median annual income is $27,000.

While it may not appear so at first, these numbers are drastically different—especially if you are applying for a home or vehicle loan, trying to start a business, deciding how many children to have, or funding a child’s college education. Indeed, an American family of three making the European median income of $27,000 a year typically lives in an apartment and has approximately $4,050 a year or less in disposable income. The U.S. median income of $42,000 upgrades the family to a home and $12,180 in annual disposable income.

That’s roughly the same as the average difference in annual median income between U.S. high school grads ($28,000) and college graduates ($45,000). That’s right: the direction of U.S. median income is headed toward less than the average wages of high school grads.

This comparison is not overstated. This is where we’re headed. Of course, the affluent classes won’t suffer this same fate, but a lot more Americans will become part of the struggling class. Just like in Europe.

Who we vote for matters.

If we want real change, we need to vote for something different.

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TJEd & College PART I: A Report on the Growing Importance of Higher Education

May 19th, 2015 // 6:40 am @ Oliver DeMille

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America’s Looming Crash: Special Report Parts I, II, III

January 9th, 2015 // 7:56 am @ Oliver DeMille

I am an optimist. I believe the best of America and the world are still ahead. But we’re only going to get there by dealing with the reality that the United States is now in an era of significant decline. Specifically, at least two things happened this year that are major problems, and a third serious problem is gaining increased support among many world leaders.

Part I

First, our federal debt went over the $18 trillion mark in 2014. Someone is going to have to pay this back, and that means we’ll be paying for it for the rest of our lives—and so will our children and grandchildren.

That’s approximately $58,065 for every man, woman, and child currently in the United States. If you have a family of four, you now owe around $232,260. This debt must be paid in addition to whatever other taxes are needed for national security, services, and all other government programs now and going forward–not to mention your family’s living expenses.

To be more realistic, the truth is that many people will never pay any taxes toward this amount—because they won’t make enough. This means you’re likely to end up being charged at least twice this amount. Some people will pay a lot more. So you really owe more like $116,130 or $464,520 for your family of four.

If you have big family, say of ten people, you owe roughly $2 million dollars over the course of the rest of your life. Whatever you don’t pay off, the government will charge your kids and grandkids.

Oh, and you need to add to that all the interest still to be charged on this amount, which means that you actually owe between $1.8 million if you have a family of four, or up to around $7 million if your family is bigger. And, yes, if interest rates on the national debt increase (all the trends indicated they will), this amount will go up rapidly.

Most people have no idea what a big deal this is. This is money that has already been spent. It’s owed. And we have to pay it, now and later. We, our kids, and their kids too.

Problems and Booms

How big is this? Multiply your salary by the number of years you have left working (x), and then multiply at least $116,130 by the number of years you have to live (y). If you make more than $60,000 a year, double both amounts. If you make more than $100,000 a year, quadruple both. Then subtract one from the other to find if you’ll make more than you already owe the government.

Too much math? That’s exactly what the government is banking on. The government only gets away with this level of borrowing and spending because very few people do the math or understand what it means to them personally. Granted, these numbers are very basic, and the reality is actually worse, given interest and rising interest rates on the national debt.

So, the United States has a problem. It has a number of problems, actually, but this one is massive. The government owes so much that our economy will struggle under the weight of this debt for the rest of the century. It will dampen every citizen’s opportunities, block every generation’s choices, and haunt our posterity for many decades.

Is there any way out of this? Yes. The answer is simple, in fact. We need a major economic boom. A massive boom would allow us to pay this off much quicker and put the nation back on positive economic footing. Without such a boom, this problem is going to deepen.

How do we get a boom? Again, the answer is simple. I’ll outline it below in Column A.

But first, what happens if we don’t make the choices that will bring a boom? The answer is clear. And drastic. Our economics will rapidly get worse. For the nation, for families, for almost everyone.

Part II

Second, China just surpassed the United States as the top producing economy in the world. It was already the top trade economy, as of a year ago. How does this translate into real life consequences for real people? Well, such a transition has happened before, and there is a predictable pattern that occurs when a new nation becomes the largest global economy.

Here is a rough outline of this pattern:

1. The new power (e.g. China) has the ability to dictate its own trade rules, which increases the flow of wealth to it—and away from the old power (e.g. the U.S.).

2. The new power’s currency eventually becomes the lead world currency (replacing the old power’s currency). When Britain lost it’s top power spot, the average British citizen lost 30% of net worth within weeks. In the current shift, the Chinese will likely push for a global currency. (More on this in Part III)

3. The old power keeps trying to regain its status by engaging in wars and military interventions around the globe, while the new power focuses mainly on economic success. This further weakens the old power, and quickly.

4. The new power, with its booming economy, is able to enjoy lower interest rates, less debt, fewer expenses for international conflicts, and much higher rates of savings and investment. The wealth of the world flows into the new power as investment capital, lifting the entire new power’s economy. The old power sees its standard of living drastically fall, while the new power watches its standard of living rapidly increase.

In the eighteenth century the old power was Spain and the new power was France, in the nineteenth century the old power was France and the new power was Britain. In the twentieth century the old power was Britain and the new power was the U.S.

Today, and in the years ahead, China is the new power, and the United States is the old power. As Brett Arends put it:

“This will not change anything tomorrow or next week, but it will change almost everything in the longer term. We have lived in a world dominated by the U.S. since at least 1945 and, in many ways, since the late 19^th century.

“And we have lived for 200 years—since the Battle of Waterloo in 1815—in a world dominated by two reasonably democratic, constitutional countries in Great Britain and the U.S.A. For all their flaws, the two countries have been in the vanguard worldwide of civil liberties, democratic processes and constitutional rights.” (Brett Arends, “It’s Official: America is now No. 2,” Market Watch, December 4, 2014)

China’s influence will certainly go in a different direction. This may be the single biggest concern of our century.

Can we do anything to reverse this trend? The answer is “Yes.”

Failure by Surrender

There is an irony to how old powers lose their leadership role. The old power usually has the ability to stay the top leader, if it chooses. But is seldom does. Why? The answer is instructive.

Old powers refuse to maintain their leader role because they make a series of bad choices:

Both Are…

This is so predictable that following the pattern of decline again in our time is ridiculous. The U.S. continues to follow this path, however. Part of this is spurred by collectivist ideological ideas, but the ultimate blame goes to voters who aren’t willing to back candidates who support truly frugal economic choices to cut government programs and incentivize a free-enterprise economic boom (Column A).

Voters in traditionally powerful nations are accustomed to lavish government programs; they vocally decry government debt, but they vote for more government programs anyway. Conservatives and liberals disagree about what to spend money on, but they both increase the size of government.

One problem is that people from both sides of the political aisle blame the other. Liberals fault conservatives for supporting continued military interventions around the world, and conservatives blame liberals for increased government programs and spending.

The truth is that both are right. Liberals adopt Column B government spending and bad anti-business regulations, and conservatives support Column B global military interventions around the world. Both kill the power and economy of the nation. In our day, both of these drastically decrease American prosperity and power and lift China to global leadership.

In simplest terms: Both are bad. But Republican voters hold on to their support of U.S. interventions in Europe, Africa, the Middle East, Asia, etc., and Democratic voters refuse to stop promoting big-spending federal programs. In our two-party system, both parties are deeply committed to Column B, though for different reasons.

If the United States keeps following this pattern, our looming crash is inevitable. If not, if we reverse it and move toward an economic boom (by adopting Column A), we’ll reboot and reestablish the top producing economy in the world.

It’s up to us. Boom or crash. The choice seems simple, yet voters keep electing leaders who implement Column B rather than Column A. If we keep it up, we’re going to get what we deserve. A crash.

In all this, the most amazing thing is how simple it would be to create a boom. Column A is direct, do-able, realistic, real. We just have to adopt it, and apply it. But if we won’t even vote for it, it won’t come.

Part III

Third, changes in the world’s currency system are gaining momentum. Few Americans realize how significant these two changes ($18 trillion in federal debt and counting, and the loss of the “#1 producing economy” status to China) will be. For example, just consider the impact of the dollar being replaced by something else as the world’s reserve currency.

While most people prefer to leave currency discussions to the experts, such head-in-the-sand behavior can’t shield them from the consequences. The next reserve currency will be the dollar, if only the U.S. adopts the items in Column A and catalyzes a major American economic boom.

If not, it will be something supported by China. Specifically, look for it to have three characteristics that will drastically restructure the entire world:

1. It will likely be a global currency, meaning that the international community (with China in the #1 spot) will regulate its use. This could easily result in a drastic reduction of national sovereignty around the world and in the U.S.
2. It will almost surely be electronic, which will give governments massive controls over people. This amounts to at least some controls from China, not just your national government. The power of regulating electronic currency is almost impossible to overstate.
3. It will also likely be sold with biotech, meaning that to access your electronic money you’ll need your finger print or eye scan. (See Molly Wood, “Augmenting Your Password-Protected World,” The New York Times, November 5, 2014) This will provide global surveillance at an unprecedented, literally more than Orwellian, level. Again, China will be a top influence (perhaps the top influence) in how this system is administered.

These three massive shifts in our world reality are mostly hidden from our view. They are reported, but few people realize how significant or personally relevant they are.

The future of our nation, our economy, and literally our society (with its God-based ideals, freedom-based values, and free enterprise economics) are at stake. If Column B prevails, an American Crash is assured.

(Oliver DeMille addresses the solutions to these challenges in his book, The United States Constitution and the 196 Principles of Freedom, available here)

Oliver DeMille is the New York Times, Wall Street Journal and USA Today bestselling co-author of LeaderShift: A Call for Americans to Finally Stand Up and Lead, the co-founder of the Center for Social Leadership, and a co-creator of TJEd.

Among many other works, he is the author of A Thomas Jefferson Education: Teaching a Generation of Leaders for the 21st Century, The Coming Aristocracy, and FreedomShift: 3 Choices to Reclaim America’s Destiny.

Oliver is dedicated to promoting freedom through leadership education. He and his wife Rachel are raising their eight children in Cedar City, Utah.

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The Article of the Year!

December 13th, 2014 // 9:53 am @ Oliver DeMille

The Best…

Last week Rachel asked me if I was going to write a “best books of the year” article like I have the last few years. “I’m not sure,” I sighed. “To tell the truth, I think it’s getting a little old. I see ‘best books,’ ‘best movies,’ ‘best albums,’ of the year, etc. in most of the national magazines and newspapers each year. In fact, I just recently read a December issue of a magazine that listed the ‘5 best of the year’ in all these categories. I think it’s a bit overdone these days.”

“That makes sense,” she responded. “But the end of the year is a profound time to look back and note important things that have happened. It’s natural, and it is good for us.” She pondered for a minute, then said enthusiastically, “What about a ‘best article of the year?’ Is there an article you wrote this year that you think is the most important one? Something everyone in America and beyond really needs to read?”

I immediately brightened and sat forward in my seat. “Yes!” I said. “There’s one article I wrote that I wish I could send out every week, over and over. I wish every person in North America would read it! And Europe, and beyond. It’s that important.”

“What is it?”

Well, here it is. The “Article of the Year!” If you read it before when it came out, please, please read it again. It’s that powerful. It’s that important. And if you haven’t read it before, now is the time.

The message of this article is extremely important! If you have children or grandchildren who will live, seek an education, and work in the next thirty years, the information in this article is vital. Absolutely vital. If you or your spouse will work in the next year, or three years, or ten years, the knowledge in this article is essential. This is an article on education, on leadership, and on the economy. Nobody should have to face the economy ahead without knowing what’s in this article! Read it! Enjoy it! Share it!

Here goes:

A Tale of Two

There are three economies in modern society. They all matter. But most people only know about two of them. They know the third exists, in a shadowy, behind-the-scenes way that confuses most people. But the first two economies are present, pressing, obvious. So people just focus on these two.

A couple of recent conversations brought these economies even more to the forefront of my thinking. First, I was meeting with an old friend, touching base about the years since we’d talked together. He mentioned that his oldest son is now in college, and how excited he is for his son’s future. I asked what he meant, and he told me an interesting story.

Over twenty years ago he ran into another of our high school friends while he was walking into his community college administration building. The two greeted each other, and they started talking. My friend told his buddy that he was there to dis-enroll from school. “I just can’t take this anymore,” he told him. “College is getting me nowhere.”

“Well, I disagree,” his buddy said. “I’m here to change my major. I’m going to get a teaching credential and teach high school. I want a steady job with good benefits.”

Fast forward almost thirty years. My friend ran into this same old buddy a few weeks ago, and asked him what he’s doing. “Teaching high school,” he replied.

“Really? Well, you told me that was your plan. I guess you made it happen. How much are you making, if you don’t mind me asking?”

When his friend looked at him strangely, he laughed and said, “I only ask because you told me you wanted a steady job with good benefits, and I wanted to get out of school and get on with real life. Well, I quit school that day, but I’m still working in a dead end job. Sometimes I wonder what I’d be making if I had followed you into the admin building that day and changed majors with you.”

After a little more coaxing, the friend noted that he didn’t make much teaching, only about $40,000 a year—even with tenure and almost thirty years of seniority. “But it’s steady work, like I hoped. Still, I’ve got way too much debt.”

After telling me this story, my old high school friend looked at me with what can only be described as slightly haunted eyes. “When he told me he makes $40K a year, I just wanted to scream,” my friend said.

“Why?” I asked.

He could tell I didn’t get what he was talking about, so he sighed and looked me right in the eyes. “I’ve worked 40 to 60 hour weeks every month since I walked off that campus,” he told me. “And last year I made about $18,000 working for what amounts to less than minimum wage in a convenience store. I should have stayed in college.”

That’s the two economies. One goes to college, works mostly in white-collar settings, and makes from thirty thousand a year up to about seventy thousand. Some members of this group go on to professional training and make a bit more. The other group, the second economy, makes significantly less than $50,000 a year, often half or a third of this amount, and frequently wishes it had made different educational choices.

The people in these two economies look at each other strangely, a bit distrustfully, wondering what “could have been” if they’d taken the other path. That’s the tale of two economies.

Most people understand the first two economies, but the Third Economy is elusive for most people. They don’t quite grasp it. In fact, you may be wondering what I’m talking about right now.

The Third Economy

This brings me to our main point. Ask members of either economy for advice about education and work, and they’ll mostly say the same thing. “Get good grades, go to college, get a good career. Use your educational years to set yourself up for a steady job with good benefits.” This is the advice my grandfather gave my father at age twenty, and the same counsel my dad gave me after high school. Millions of fathers and mothers have supplied the same recommendations over the past fifty years.

This advice makes sense if all you know are the two economies. Sadly, the third economy is seldom mentioned. It is, in fact, patently ignored in most families. Or it is quickly discounted if anyone is bold enough to bring it up.

A second experience illustrates this reality. I recently visited the optometrist to get a new prescription for glasses. During the small talk, he mentioned that his younger grandchildren are in college, but scoffed that it was probably a total waste of time. “All their older siblings and cousins are college graduates,” he said, “and none of them have jobs. They’ve all had to move back home with their parents.”

He laughed, but he seemed more frustrated than amused. “It’s the current economy,” he continued. “This presidential administration has been a disaster, and it doesn’t look like anyone is going to change things anytime soon. I don’t know what these kids are supposed to do. They have good degrees—law, accounting, engineering—but they can’t find jobs. Washington has really screwed us up.”

I brought up the third economy, though I didn’t call it that. What I actually said was: “There are lots of opportunities in entrepreneurship and building a business right now.” He looked at me like I was crazy. Like maybe I had three heads or something. He shook his head skeptically.

“Entrepreneurship is hard work,” I started to say, “but the rewards of success are high and…”

He cut me off. Not rudely, but like he hadn’t really heard me. That happens a lot when you bring up the third economy.

“No,” he assured me, “college is the best bet. There’s really no other way.”

I wasn’t in the mood to argue with him, so I let it go. But he cocked his head to one side in thought and said, slowly, “Although…” Then he shook his head like he was discounting some thought and had decided not to finish his sentence.

“What?” I asked. “You looked like you wanted to say something.”

“Well,” he paused…then sighed. I kept looking at him, waiting, so he said, “The truth is that one of my grandsons didn’t go to college.” He said it with embarrassment. “Actually, he started school, but then dropped out in his second year. We were all really worried about him.”

He paused again, and looked at me a bit strangely. I could tell he wanted to say more, but wasn’t quite sure how to go about it.

“What happened?” I prompted.

What Really Works

“To tell you the truth, I’m not really sure. He started a business. You know, one of those sales programs where you build a big group and they buy from you month after month. Anyway, he’s really doing well. He paid off his big house a few years ago—no more mortgage or anything. He has nice cars, all paid for. And they travel a lot, just for fun. They fly chartered, real fancy. He and his wife took us and his parents to Hawaii for a week. He didn’t even blink at the expense.”

“That’s great,” I told him. “At least some people are doing well in this economy.”

He looked at me with that strange expression again. “I’m not sure what to make of it,” he said. “I keep wondering if he’s going to finish college.”

I was surprised by this turn of thought, so I asked, “So he can get a great education, you mean? Read the classics? Broaden his thinking?”

He repeated the three heads look. “No. He reads all the time, way more than anyone else in the family. He doesn’t need college for that. I want him to go back to college so he can get a real job.”

I laughed out loud. A deep belly laugh, it was so funny. I didn’t mean to, and I immediately worried that I would offend him, but he grinned. Then he shook his head. “I know it’s crazy, but I just keep worrying about him even though he’s the only one in the family who is really doing well. The others are struggling, all moved back in with their parents—spouses and little kids all in tow. But they have college degrees, so I keep thinking they’ll be fine. But they’re not. They’re drowning in student debt and a bunch of other debts. It just makes no sense.”

He sighed and talked bad about Washington again. Finally he said, “I’ve poured so much money into helping those kids go to college, and now the only one who has any money to raise his family is the one who dropped out. It just doesn’t make any sense.” He kept shaking his head, brow deeply furrowed.

I left his office thinking that he’s so steeped in the two economies he just doesn’t really believe the third economy exists. He just doesn’t buy it, even when all the evidence is right there in front of him. The whole economy has changed. It’s not your father’s or grandfather’s economy anymore. It just isn’t. Sadly, he just doesn’t get that the reality has changed.

Who Gets It

He’s not alone. The whole nation—most of today’s industrialized nations, in fact—are right there with him. So many people believe in the two economies, high school/blue collar jobs on the one hand, and college/white collar careers on the other. Most people just never quite accept that the entrepreneurial economy is real. They don’t realize that there are many less white collar jobs per capita now, and that this trend shows all the signs of increasing. They don’t admit the truth, that over half of college grads in recent years can’t find jobs, and a huge number of those with degrees and without degrees are moving back home just to survive. But the third economy is flourishing.

It’s too bad so many people won’t admit this, because that’s where nearly all the current top career and financial opportunities are found. The future is in the third economy, for those who realize it and get to work. If you’ve got kids, I hope you can see the third economy—for their sake. Because it’s real, and it’s here to stay. The first two economies are in major decline, whatever the so-called experts claim. Alvin Toffler warned us in his bestseller FutureShock that this was going to happen, and so did Peter Drucker, back when they first predicted the Information Age. Now it’s happening.

I hope more of us realize the truth before it’s too late. Because China gets it. So does India, and a bunch of other nations. The longer we take to get real and start leading in the entrepreneurial/innovative third economy (the real economy, actually), the harder it will be for our kids and grandkids. The third economy will dominate the twenty-first century. It already is, in fact. Whether you’ve chosen to see it yet or not. This is real. This is happening. This is the future. This is the current reality.

Truth is truth, even when our false traditions and outdated background refuse to let us see clearly. The parents who see this, embrace it, and help their kids prepare to take action in the third economy are providing a real education for their family. Everyone else…isn’t.

Oliver DeMille is the New York Times, Wall Street Journal and USA Today bestselling co-author of LeaderShift: A Call for Americans to Finally Stand Up and Lead, the co-founder of the Center for Social Leadership, and a co-creator of TJEd.

Among many other works, he is the author of A Thomas Jefferson Education: Teaching a Generation of Leaders for the 21st Century, The Coming Aristocracy, and FreedomShift: 3 Choices to Reclaim America’s Destiny.

Oliver is dedicated to promoting freedom through leadership education. He and his wife Rachel are raising their eight children in Cedar City, Utah

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